Save Article

Business Blasts Ozone Limits

Trade Groups Warn White House That New EPA Curbs Would Choke Off Growth

By

Stephen Power

July 21, 2011

Business groups are stepping up pressure on the Obama administration to stop the Environmental Protection Agency from enacting tougher limits on smog-forming ozone, saying a new rule pending White House approval would damp the fragile economic recovery.

Related Article

EPA administrator
Lisa Jackson
is pushing back, with encouragement from environmental and medical groups, stressing the threat smog poses to public health and likening some of the groups' warnings to predictions in the 1990s that tighter limits on ozone would lead to the banning of fireworks and backyard barbecues. The EPA says tightening the standard could save as many as 12,000 lives a year and generate as much as $100 billion annually in health benefits by 2020, by reducing spending on health problems associated with excessive ozone, such as asthma and bronchitis.

A White House spokesman said that President Barack Obama supported a standard "guided by science and the law" and that in implementing a standard "we will do so in a way that maximizes flexibility to ensure it does not impede our economic recovery in any way."

The ozone issue presents the White House with a difficult choice between angering environmentalists, many of whom cheered Mr. Obama's election in 2008 but have voiced disappointment with some of his policies, and vexing the business community—and opening itself to further Republican attacks on the president's regulatory policies as the election campaign gets under way. Business groups are casting the proposal as a threat to jobs, a sensitive issue with unemployment above 9%, and sense that Ms. Jackson, who in the case of ozone faces no court mandate, is vulnerable.

In recent days, the heads of more than half a dozen trade associations—including the Business Roundtable, the U.S. Chamber of Commerce, the National Association of Manufacturers and the American Petroleum Institute—have met with Ms. Jackson to try to persuade her not to go forward with a proposal to set the nation's air-quality standard for ozone at 60 to 70 parts per billion. In 2008, the George W. Bush administration tightened the ozone standard to 75 ppb, where it stands now, from 84 ppb.

The new constraint would be expensive. The EPA says a standard of 60 ppb could cost the economy as much as $90 billion annually by 2020. The costs could include new emissions controls that businesses might have to install; higher electricity prices as power plants switched to cleaner-burning but costlier fuels; and more frequent auto inspections. Business groups say the costs could be significantly higher because the proposal assumes the use of certain technologies that have yet to be developed.

Local governments deemed out of compliance with federal air-quality standards must come up with plans for achieving compliance or risk the loss of federal highway dollars. Business groups say new and expanding businesses would be required to install new pollution controls to avoid any emission increases, and some would either hold off on investing or shift their operations elsewhere., including outside the U.S.

Buildings in Los Angeles are shown on a smoggy afternoon in 2006.
Agence France-Presse/Getty Images

The chairman of the Business Roundtable's Regulatory Reform Working Group,
Dow Chemical Co.
CEO Andrew Liveris, has also appealed to White House Chief of Staff
Bill Daley,
telling him in an open letter last week that whatever standard the administration picks would be prohibitively expensive and could "seriously impede economic expansion." Just last month, Mr. Obama announced that Mr. Liveris would lead a joint effort by industry, universities and the federal government to help reposition the U.S. as a leader in cutting-edge manufacturing.

"Establishing these new ozone standards would be tantamount to putting Not Open for Business signs in counties across the country at precisely the wrong moment, when unemployment is high and on the rise," the Business Roundtable's president,
John Engler,
told reporters during a conference call Tuesday.

Ms. Jackson has said tightening the ozone standard is "long overdue" but has delayed a final decision on her agency's proposal three times in the past year. Earlier this month, the EPA forwarded a draft final decision on ozone to a White House office that reviews major proposed regulations before publication.

The American Lung Association wrote in its own letter to Mr. Daley on Monday that "following the advice of the [Business] Roundtable will lead to unnecessary illness and death and is not in compliance with the law." The group noted that the EPA's proposal is consistent with the recommendation of a 23-member panel of scientists who advised the agency on the issue after reviewing more than 1,700 studies.

Part of the reason business groups are upset with Ms. Jackson is that she has reopened what they thought was an issue settled when the Bush administration tightened the standard. The EPA normally waits at least five years before revising the standards.

Moreover, unlike some other rules that have generated business opposition, such as an EPA proposal to tighten limits on pollution from industrial boilers, the lower ozone limit hasn't been ordered by a court. That distinction, businesses say, gives Ms. Jackson the latitude to refrain from tightening the standard.

Ms. Jackson has countered that the Bush ozone standards were "not legally defensible, given the scientific evidence" before the agency.